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It's when they have an open wound and a fly lays eggs and they get infested with maggots. If it is left on, the maggots will grow to be flies eventually and lay eggs of their own starting the process over and it can kill the animal due to ammonia excreted from maggots or shock/infection.

A friend had to clean sheep with fly strike when he lived in New Zealand - and as far as I know you cut fur around the strike, use some type of insecticide/antibiotic to get the maggots off and put all the maggots you find in a bag in the sunlight. It kills the maggots and ends the life cycle at that point.

You have to make sure to keep applying antibiotic after that and make sure no more eggs are in the animal. You also should separate the animal from any compadres until they are healed up.